Check Out The Chart: Lots of Potential, Lots of Hurdles

The question that many precious metals experts and traders have been asking this year is when are gold and silver mining stocks going to start to trading more inline with the underlying metals? Maybe that question has been asked more frequently regarding gold because has outperformed silver this year, but silver miners have also lagged silver futures. As of today, there is just one ETF tracking silver miners: The Global X Silver Miners ETF

. iShares filed plans in November to introduce a rival fund, but SIL is the king of silver mining ETFs and a favorite of traders. The Global X Silver Miners ETF has also been clearly trumped by the iShares Silver Trust

this year. Year-to-date, SLV is slightly higher while SIL is down more than 15%. Of course, the silver market is volatile and can change on a dime, so taking a look at SIL's technical picture with an eye toward to 2012 makes sense today. With Thursday's close at $23.22, SIL is up over 10% in the past five trading days and should the market continue rallying into year-end, this high-beta ETF is likely to particpate. But there's an “if.” Actually, there's two “ifs.” First and foremost, silver prices need to rise. Then SIL needs to break some resistance just over $24. Wait, the fun doesn't end there. The move to $24 won't legitimize a rally for SIL because the ETF needs to traverse its 200-day line around $25. Above $25, SIL has some room to run before it sees next material resistance around $28. Get up there, and we might be able to start talking about SIL making a run into the low $30s. On the downside, support looks somewhat firm at $19 and below there, there's an invitation to short the ETF or get out. Maybe this fundamental forecast from

will come to fruition and drive silver prices higher: “If they (silver miners) were to reinvest all their earnings back into silver, it would shrink available 2011 investment supply by 82%... Silver miners need to acknowledge that investors buy their shares because they believe the price of silver is going higher.  We certainly do, and we are extremely active in the silver equity space.  We would never buy these stocks if we didn't.  Nothing would please us more than to see these companies begin to hold a portion of their cash reserves in the very metal they produce.  Silver is just another form of currency today, after all, and a superior one at that.” Fingers crossed for SIL bulls. Long above $24. More bullish above $25. Very bearish below $19. Check out the chart. It's all in there.